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Daily FX Brief, Aug 12 – Top Trade Setups In Forex on Monday!


For what was quiet inception to the new trading week, volatility grew back across global markets from the London session yesterday. Gold was an exceptional mover yesterday marking a move to $1,520 highs, edging closer to my $1,560 (July) call on Gold.

There are so many risks encompassing the Brexit scenario lately, and the clock is ticking on the October deadline. For that cause, (plus the point that I can see a possible push back into long USD positioning), the sell GBPUSD is one clean trade idea before of tonight’s UK wage data & US inflation data.

Economic Events to Watch Today



EUR/USD – Daily Outlook

The volatility has stalled in the wake of the new week as some traders have gone on vacation. Italy’s deputy PM Matteo Salvini has followed holiday-goers – and voters – visiting the beaches of his country as he kicks off his election campaign. And that could trigger the next moves.

Today most of the focus stays on the U.S. CPI figures which are likely to drive price action in the market.

US Inflation 12:30 GMT
The Federal Reserve cut rates because of two main reasons – trade tensions and subdued inflation. The Consumer Price Index is anticipated to climb by 0.3% and Core CPI by 0.2% MoM and remain at 2.1% YoY. Any 0.1% deviation may have a significant impact on all markets.

The single currency Euro locked a three-week losing streak vs the dollar last week, adding around 0.83%. Despite clocking multi-year lows of 1.1024, the pair traded sideways in 1.1119-1.1295.

Price action staged a majestic recovery last week and locked a three-week losing streak. Continued demand and bullish breakout of 1.1295 could see the unit knock on 1.1445’s door again. On the other hand, support is not expected to emerge until bouncing hands with the 2016 yearly opening level at 1.0873.

Daily Support and Resistance

R3: 1.1333

R2: 1.127

R1: 1.1236

Key Trading Level: 1.1208

S1: 1.1173

S2: 1.1145

S3: 1.1082

EUR/USD – Trading Tips

Consider trading sideways within a narrow trading range of 1.1245 – 1.1165. However, a breakout on either side is likely to determine the next trend in the EUR/USD.

GBP/USD – Daily Outlook

The GBP/USD pair trimmed higher this Monday, but hesitated at around the 1.2100 prices, to settle some 30 pips under this last. The early boost came as a consequence of speculation MPs would try to prevent a no-deal Brexit through another extension to Art. 50. It seems inconceivable they would succeed due to the lack of time, as the Parliament will resume its activity in September. Despite the broad dollar’s weakness, buyers lost enthusiasm. The U.K. will deliver employment data later today. While speculation arises around a UK election early November. GBP/USD to expedite its slump on a break below 1.2020.

UK Labor Report – 8:30 GMT

The UK labor market is hustling despite Brexit uncertainty. Wages stay in the center of the stage as the Bank of England is concentrated on inflation – including price rises arising from higher salaries.

Average Hourly Earnings are anticipated to grow by 3.7% on an annual basis in June, an expedition from 3.4% in May.

The unemployment rate is anticipated to stay put at 3.8% – a historic low.
The jobless rate remains dizzy despite an uptick in the Claimant Count Change, which supports expectations for another surge of 42K this time.

Speaking about the technical side, the GBP/USD is following tunneling through bids residing within long-standing demand at 1.2365-1.2615 (now acting resistance area) and defeating the 2017 annual opening level at 1.2329, the subsequent downside objective on the weekly timeframe settles in around support from 1.1904: a standout low clocked in early October 2016.

GBP/USD currency pair continues to drop below 1.2095 support level amid no-Brexit deal sentiments. The pair has violated long-held support, the triple bottom level of 1.2097 which has pushed the GBP/USD into fresh selling zones. The next support is expected to be 1.1998.

Daily Support and Resistance

R3: 1.229

R2: 1.2221

R1: 1.2182

Key Trading Level: 1.2151

S1: 1.2113

S2: 1.2082

S3: 1.2013

GBP/USD – Trading Tips

Consider staying bearish below 1.2060 while having a target of around 1.2015 and 1.1995 today.

USD/JPY – Daily Outlook

Japanese banks are closed in observance of Mountain Day, which is why we may experience lack of volatility and trading volume today.

So far, the U.S. dollar traded on the defensive against the safe-haven yen on Monday as the Sino-U.S. trade conflict seemed set to drag on with no settlement in view, while holidays in Japan and Singapore made for very thin trading.

Apart from Monday’s strong boost, the daily candles gained thin air above a historical trend line support-turned-resistance (taken from the low 1.1181), rejecting the level in the form of back-to-back selling wicks/inside days.

Consequently, a push to support at 1.1109, strictly observed by support at 1.1101, is a possibility this week. A violation of the said trend line resistance, however, may call for a run towards the 200-day SMA (orange – currently circulating 1.1294).

Daily Support and Resistance

R3: 107.67

R2: 106.84

R1: 106.53

Key Trading Level: 106.01

S1: 105.7

S2: 105.18

S3: 104.35

USD/JPY– Trading Tips

Let’s keep an eye on 105.350, has the USD/JPY is likely to stay bearish below this and bullish above this level. On the lower side, the target remains at 104.700 and 104.110.

All the best!


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